
As we have noticed with many upstream (drilling) and midstream (pipeline) companies over the years, these companies often float new IOUs (or "notes") to pay off old IOUs. Midstream giant Williams is one of the latest to do so. Last Wednesday, May 31, Williams announced they would float $1.45 billion in new notes, due payable in 2027. The reason? To pay off notes due in 2023. Yesterday Williams said they got the new notes all sold. The up side to swapping debt, in this case, is that the new notes pay an interest rate of 3.75%, whereas the notes they are paying off (due in 2023) have an interest rate of 4.875%. So Williams shaved more than a full point off the interest they are paying for their IOUs--a technique that will save the company big bucks...
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